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Correspondent

23 August 2024 at 4:29:04 pm

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local....

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local. This reversal owes much to policy. The recent rationalisation of the Goods and Services Tax (GST) which trimmed rates across categories from garments to home furnishings, has given consumption a timely push. Finance Minister Nirmala Sitharaman’s September rate cuts, combined with income tax relief and easing interest rates, have strengthened household budgets just as inflation softened. The middle class, long squeezed between rising costs and stagnant wages, has found reason to spend again. Retailers report that shoppers filled their bags with everything from lab-grown diamonds and casual wear to consumer durables and décor, blurring the line between necessity and indulgence. The effect has been broad-based. According to Crisil Ratings, 40 organised apparel retailers, who together generate roughly a third of the sector’s revenue, could see growth of 13–14 percent this financial year, aided by a 200-basis-point bump from GST cuts alone. Small traders too have flourished. The Confederation of All India Traders (CAIT) estimates that 85 percent of total festive trade came from non-corporate and traditional markets, a robust comeback for brick-and-mortar retail that had been under siege from online rivals. This surge signals a subtle but significant cultural shift. The “Vocal for Local” and “Swadeshi Diwali” campaigns struck a patriotic chord, with consumers reportedly preferring Indian-made products to imported ones. Demand for Chinese goods fell sharply, while sales of Indian-manufactured products rose by a quarter over last year. For the first time in years, “buying Indian” has become both an act of economic participation and of national pride. The sectoral spread of this boom underlines its breadth. Groceries and fast-moving consumer goods accounted for 12 percent of the total, gold and jewellery 10 percent, and electronics 8 percent. Even traditionally modest categories like home furnishings, décor and confectionery recorded double-digit growth. In the smaller towns that anchor India’s consumption story, traders say stable prices and improved affordability kept registers ringing late into the festive weekend. Yet, much of this buoyancy rests on a fragile equilibrium. Inflation remains contained, and interest rates have been eased, but both could tighten again. Sustaining this spurt will require continued fiscal prudence and regulatory clarity, especially as digital commerce continues to expand its reach. Yet for now, the signs are auspicious. After years of subdued demand and inflationary unease, India’s shoppers appear to have rediscovered their appetite for consumption and their faith in domestic enterprise. The result is not only a record-breaking Diwali, but a reaffirmation of the local marketplace as the heartbeat of India’s economy.

Masters of the Machine

In their brilliantly original 2023 book, Acemoglu and Johnson upend techno-optimism, revealing how choices we make about technology have repeatedly reshaped power and prosperity.

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Technology, more specifically in the avatar of artificial intelligence today, has been extolled as being beneficial, uplifting and conducive to shared prosperity for humans. But is it really so? Or is it increasingly being manipulated and misused by a few powerful, economically well-placed elites in order to further their vested interests?


In ‘Power and Progress: Our 1000-Year Struggle Over Technology and Prosperity,’ Daron Acemoglu and Simon Johnson, both of whom received the Nobel prize in Economics last year, argue that today, as in certain periods in the past, technological progress is to a large extent being used for automation in order to eliminate worker employment, surveillance of workers in order to extract more out of them, and to eliminate organized trade unionism in order to reduce wages and cause the plummeting of bargaining powers of the workers. This results in the concentration of wealth in the hands of a few economically strong and influential cartels, while diminishing chances of shared prosperity among humankind.


Even in the past, this scenario has not always been so sinister and depressing. The Industrial Revolution unleashed a great wave of exploitation, but workers did rally themselves, present their views to their economic and political masters and succeeded in passing laws that vastly improved their working conditions, timings and increased their wages enabling them to live a decent and economically satisfying life.


In the United States, in the early twentieth century, laws against trusts, monopolies and the funding of federal politicians by companies were enacted. Prior to this, there were situations in which powerful corporations were giving money to Senators in order to have laws passed in their favour. Rockefeller even made a secret deal with the railways to charge his competitors more for transporting their consignments in order to eliminate competition. The Progressives, in the form of journalists, civil society activists and politicians (such as Woodrow Wilson and Theodore Roosevelt) unraveled these dark secrets to the public, made them more aware of wrongdoings and were responsible for the passage of several remedial laws and acts. The New Deal launched by Franklin D. Roosevelt revolutionized the bargaining power of workers by enabling large-scale worker-employer contact.


Unfortunately, at least in the United States, trade unionism has been enfeebled, mainly because worker-employer discussions for shared productivity gains take place at the warehouse level. In Germany, for instance, workers have unions and work councils in many German companies and have been consulted in many organizational and technological decisions. They have also reversed several decisions which aimed at excessive automation. In the dual-track German system, works councils are engaged in communication and coordination in workplaces and can have a say in technology and training decisions, whereas industry unions are more focused on wage setting.


Taiwan is a shining example of how technology, in the form of digital tools, can be optimally used. Audrey Tang, today a minister in Taiwan for digital communication and transparency, previously a software entrepreneur and programmer, volunteered to help the Sunflower movement communicate its message to the broader public. After the Democratic Progressive Party came to power in the 2016 general election, Audrey has built a variety of digital tools for providing transparency in government decision making and for increasing deliberation and consultation with the public. This digital-democracy approach was used for a number of key decisions, including the regulation of the ride-sharing platform Uber and of liquor sales. Another platform, g0v, provides open data from several Taiwanese ministries, which civic hackers can use to develop alternative versions of bureaucratic services. These technologies helped Taiwan’s early and effective response to COVID-19, in which the private sector and civil society collaborated with the government to develop tools for testing and contact tracing.


New forums for virtual participation, however, can repeat the same mistakes that social media commits today, exacerbating echo chambers and extremism. Once such tools start being used extensively, some parties will come up with strategies to spread disinformation, whereas others might use such platforms for demagoguery.


The message is that technology should be used for shared prosperity, benefiting all, and not wielded as a powerful tool in the hands of a select and favoured few to dominate, spy upon, and artificially regulate the lives of the vast majority of citizens to suit their nefarious, selfish aims. Do echoes of Orwell’s ‘1984’ and Huxley’s ‘Brave New World’ ring in the background? One shivers to conceptualize what the repercussions of misdirected technology would be if the latter were emphatically implemented.

(The writer is a Mumbai based educator. Views personal.)

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